Meta and other tech companies are betting that fuzzy mascots can win over AI skeptics
Meta, Anthropic and OpenAI are each leveraging cute designs and products to appeal to consumers.
On top of technical performance metrics, there seems to be a new criteria to judge AI agents by: cuteness.
Meta Platforms (META) became the poster child for cute agents last month when it introduced its AI agent Muse, branded with a fuzzy avatar named Jolly. The avatar, which users can customize and rename to their liking, sits at the top of the Muse chat interface and displays a typing animation as it processes queries. Meta also announced its upcoming Muse Charm product, a Tamagotchi-shaped keychain that allows users to access Muse on the go without a phone.
Other companies are following suit. OpenAI's Dots agents, which also launched last month, let users pick from fuzzy characters like Todd the frog, digital pets or custom-designed avatars. Earlier this week, Anthropic hosted a limited giveaway of "Clawd" plushies and stickers - a reference to the pixelated crab logo featured in the Claude Code terminal tool. And SpaceX's (SPCX) Grok Bot lets users pick from a collection of blob-like avatars with cylindrical eyes.
The startup Manus AI, which Meta once sought to buy, has its own platform for organizing a team of big-eyed AI avatars which, like Dots, come in various shapes and colors and can emote. "We wanted it to feel friendly and close to everyday life, rather than like a serious tool," a Manus spokesperson told MarketWatch.
The cuteness overload in the AI space comes as companies are looking to shift the public's negative perception of the technology. Andrew Steinwold, managing partner at investment firm Sfermion, believes Muse's customizable avatar is an effective way to encourage adoption and help users connect with the product. Negative sentiment around AI has proven an obstacle to its development, as people worry about the impacts of the technology on the job market and push back against data-center projects.
A cute AI agent is likely to generate more traction among consumers than a utilitarian large language model, Steinwold said. Everyday people are likely to view traditional chatbots as glorified search engines, he believes.
On the other hand, little digital companions can make AI more palatable to users, providing an entry point to show off real-world capabilities such as ordering groceries or booking reservations.
"Suddenly, being able to do actions for you is a totally different value proposition versus just answering questions," Steinwold told MarketWatch. "That's a big step towards people liking AI more."
A time-tested strategy to sell products
In China, AI companies have already had success using cuddly companions to attract users to their products.
Paulina McPadden, investment manager at Baillie Gifford, likened American companies' branding choices to the viral "raising a lobster" trend that gripped China earlier this year, which refers to the process of installing and running the AI agent OpenClaw.
In China, the agent drew interest from schoolchildren, retirees and everyone in between. Thousands flocked to OpenClaw events to learn how to install the software. Users dubbed the red agent "Lobster," treating it like a digital pet.
"Consumer agents seem to have been a bit slower to take off in the West," McPadden said. Indeed, sentiment around AI is much more positive in China than in the U.S. According to Stanford University's 2025 AI Index, 84% of Chinese respondents were excited by AI-powered products and services, while that number was only 38% in the U.S.
Leveraging cuteness to sell products isn't exactly a new phenomenon - just ask the toy industry, which thrives on getting kids and young adults invested in collecting new cute or cuddly products. Squishmallows, Labubus, Jelly Cats and other recent crazes have each leveraged a cute aesthetic to generate major revenue, according to reports.
And AI companies have already been working that angle. Researchers have found that making AI voice assistants, like Amazon.com's (AMZN) Alexa, appear cuter increases the likelihood that consumers make a purchase. It also helps people form attachments to their AI chatbots and agents, which can influence them to maintain their relationships - and spend more.
Alexis Yim, a marketing professor at Radford University who co-authored a study on how cuteness impacts relationships with AI agents, said that "cute, appealing appearances" can activate the reward-related areas of the brain. In other words, buying cute and approachable products can make people feel good.
When people get attached to their AI agents, they're also more likely to follow their suggestions, which can lead to them spending more money on the services and products that agents endorse, Yim said. OpenAI last month introduced sponsored agents, or AI representatives for certain businesses, in ChatGPT, while the startup Instinct has partnered with Shopify (SHOP) to make it easier to find and buy products.
However, leaning into cuteness comes with its own risks. "There's a lot of responsibility that comes with that," Sfermion's Steinwold said. As agents become more useful, they become personalized to their users and can influence people's actions with their responses.
The startup Pickle on Thursday joined the agent craze with a "personal AI you raise," a concept popularized by Tamagotchis in the 1990s. Each of its agents, which are also called Pickle, "acts for you and talks to others," according to CEO Daniel Park. Like Muse and Dots, Pickle agents appear customizable and cute: A promotional video showed off a purple creature with big, wide eyes named Gummy.
Park told MarketWatch that "everyday people naturally anthropomorphize AI and treat it as something alive," which helps them form attachments and make their AI really personal. Pickle mimics the family-friendly design of Pixar and Walt Disney (DIS) characters, which can help avoid what Park described as the "huge drift in consumer AI toward sexualization and unhealthy emotional dependence."
-Christine Ji -William Gavin